Reference Number: 2023-005
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: CDBG Entitlement Grant Cluster
Assistance Listing Number: 14.218
Award Number and Period: B-22-UC-24-0011, B-20-UW-24-0011
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance - 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charge to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must:
(i) Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity;
(vi) Support the distribution of the employee's salary and wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
Time and Effort Certifications were not documented in accordance with federal requirements. The County was unable to provide adequate support to validate actual payroll expenses charged to the federal program for 1 of 40 time and effort certifications tested.
Cause:
The County did not have adequate controls to ensure that time and effort reporting was performed in accordance with federal requirements.
Effect:
There is an increased risk of charging unallowed payroll costs to the program.
Questioned Costs:
$1,260
Recommendation:
The County should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The County should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-010
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: CDBG Entitlement Grant Cluster
Assistance Listing Number: 14.218
Award Number and Period: B-22-UC-24-0011, B-20-UW-24-0011
Compliance Requirement: Reporting
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
24 CFR Part 75, requires that grantees enter their Section 3 activities on the closeout screens in IDIS as well as within their annual reporting in the Consolidated Annual Performance and Evaluation Report (CAPER). Beginning in July 2021, grantees reporting in Disaster Recovery Grant Reporting system (DRGR) shall identify those activities that are subject to Section 3 requirements in the applicable DRGR action plan. DRGR is the management information system primarily used by CDBG-DR, CDBG-MIT, NSP, and RHP grantees to access grant funds and report performance accomplishments for grant-funded activities. The grantee must enter Section 3 accomplishments in the performance report as progress is made towards the Section 3 benchmarks.
A grantee’s CAPER, submitted through the IDIS e-Con Planning Suite, is due 90 days after the close of a jurisdiction’s program year.
Condition:
The FY2022 CAPER report was due by September 29, 2023, but was submitted on December 29, 2023.
Cause:
The County does not have effective controls in place to ensure reports are submitted timely.
Effect:
The County is not in compliance with the program’s reporting requirements which could impact the Federal agencies ability to monitor the program.
Recommendation:
We recommend the County review and enhance their procedures to ensure that all required reports are submitted accurately and timely.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-005
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: CDBG Entitlement Grant Cluster
Assistance Listing Number: 14.218
Award Number and Period: B-22-UC-24-0011, B-20-UW-24-0011
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance - 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charge to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must:
(i) Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity;
(vi) Support the distribution of the employee's salary and wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
Time and Effort Certifications were not documented in accordance with federal requirements. The County was unable to provide adequate support to validate actual payroll expenses charged to the federal program for 1 of 40 time and effort certifications tested.
Cause:
The County did not have adequate controls to ensure that time and effort reporting was performed in accordance with federal requirements.
Effect:
There is an increased risk of charging unallowed payroll costs to the program.
Questioned Costs:
$1,260
Recommendation:
The County should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The County should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-010
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: CDBG Entitlement Grant Cluster
Assistance Listing Number: 14.218
Award Number and Period: B-22-UC-24-0011, B-20-UW-24-0011
Compliance Requirement: Reporting
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
24 CFR Part 75, requires that grantees enter their Section 3 activities on the closeout screens in IDIS as well as within their annual reporting in the Consolidated Annual Performance and Evaluation Report (CAPER). Beginning in July 2021, grantees reporting in Disaster Recovery Grant Reporting system (DRGR) shall identify those activities that are subject to Section 3 requirements in the applicable DRGR action plan. DRGR is the management information system primarily used by CDBG-DR, CDBG-MIT, NSP, and RHP grantees to access grant funds and report performance accomplishments for grant-funded activities. The grantee must enter Section 3 accomplishments in the performance report as progress is made towards the Section 3 benchmarks.
A grantee’s CAPER, submitted through the IDIS e-Con Planning Suite, is due 90 days after the close of a jurisdiction’s program year.
Condition:
The FY2022 CAPER report was due by September 29, 2023, but was submitted on December 29, 2023.
Cause:
The County does not have effective controls in place to ensure reports are submitted timely.
Effect:
The County is not in compliance with the program’s reporting requirements which could impact the Federal agencies ability to monitor the program.
Recommendation:
We recommend the County review and enhance their procedures to ensure that all required reports are submitted accurately and timely.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-008
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Award Number and Year: MD033, 2023
Compliance Requirement: Special Test – Top of the Waiting List
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
The Public Housing Authority (PHA) must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. "Selection" from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.01 through 982.207).
Condition:
We were unable to perform testing as there were no individuals pulled from the waitlist during FY 2023.
Cause:
Due to staffing shortfalls, the County did not pull any individuals from the waitlist.
Effect:
We were unable to determine if the County was incompliance with the Top of the Waiting List requirement.
Questioned Costs:
Undetermined.
Recommendation:
We recommend the County ensure individuals are selected from the top of the waiting list in accordance with program requirements.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-009
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Award Number and Year: MD033, 2023
Compliance Requirement: Special Test – Reasonable Rent Changes
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
The PHA’s administrative plan must state the method used by the PHA to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The PHA determination must consider unit attributes, such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner.
The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is reasonable rent (initially and during the term of the HAP contract) (2 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507).
Condition:
The County was unable to provide a listing of tenants with rent increases during the FY 2023 to determine the reasonableness of rent changes.
Cause:
The County’s software vendor was unable to provide a report to show tenants with rent increases during FY 2023.
Effect:
We were unable to determine if the County was incompliance with the reasonable rent change requirement.
Questioned Costs:
Undetermined.
Recommendation:
We recommend the County keep records to show all tenant who had a rent increase during the year.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-008
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Award Number and Year: MD033, 2023
Compliance Requirement: Special Test – Top of the Waiting List
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
The Public Housing Authority (PHA) must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. "Selection" from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.01 through 982.207).
Condition:
We were unable to perform testing as there were no individuals pulled from the waitlist during FY 2023.
Cause:
Due to staffing shortfalls, the County did not pull any individuals from the waitlist.
Effect:
We were unable to determine if the County was incompliance with the Top of the Waiting List requirement.
Questioned Costs:
Undetermined.
Recommendation:
We recommend the County ensure individuals are selected from the top of the waiting list in accordance with program requirements.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-009
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Award Number and Year: MD033, 2023
Compliance Requirement: Special Test – Reasonable Rent Changes
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
The PHA’s administrative plan must state the method used by the PHA to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The PHA determination must consider unit attributes, such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner.
The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is reasonable rent (initially and during the term of the HAP contract) (2 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507).
Condition:
The County was unable to provide a listing of tenants with rent increases during the FY 2023 to determine the reasonableness of rent changes.
Cause:
The County’s software vendor was unable to provide a report to show tenants with rent increases during FY 2023.
Effect:
We were unable to determine if the County was incompliance with the reasonable rent change requirement.
Questioned Costs:
Undetermined.
Recommendation:
We recommend the County keep records to show all tenant who had a rent increase during the year.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-008
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Award Number and Year: MD033, 2023
Compliance Requirement: Special Test – Top of the Waiting List
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
The Public Housing Authority (PHA) must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. "Selection" from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.01 through 982.207).
Condition:
We were unable to perform testing as there were no individuals pulled from the waitlist during FY 2023.
Cause:
Due to staffing shortfalls, the County did not pull any individuals from the waitlist.
Effect:
We were unable to determine if the County was incompliance with the Top of the Waiting List requirement.
Questioned Costs:
Undetermined.
Recommendation:
We recommend the County ensure individuals are selected from the top of the waiting list in accordance with program requirements.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-009
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Award Number and Year: MD033, 2023
Compliance Requirement: Special Test – Reasonable Rent Changes
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
The PHA’s administrative plan must state the method used by the PHA to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The PHA determination must consider unit attributes, such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner.
The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is reasonable rent (initially and during the term of the HAP contract) (2 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507).
Condition:
The County was unable to provide a listing of tenants with rent increases during the FY 2023 to determine the reasonableness of rent changes.
Cause:
The County’s software vendor was unable to provide a report to show tenants with rent increases during FY 2023.
Effect:
We were unable to determine if the County was incompliance with the reasonable rent change requirement.
Questioned Costs:
Undetermined.
Recommendation:
We recommend the County keep records to show all tenant who had a rent increase during the year.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-004
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19-Emergency Rental Assistance
Assistance Listing Number: 21.023
Award Number and Year: 2021
Compliance Requirement: Reporting
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance: Quarterly reports are required to be submitted in accordance with Treasury guidance beginning in the first quarter of 2021 through September of 2022 for ERA1 and through September of 2025 for ERA 2. The quarterly reports are required to be submitted by the 15th of the following month.
Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
For 2 of the 5 reports tested, we were unable to verity key line items were submitted. Also, 1 of the 5 quarterly reports tested were not submitted timely.
Cause:
The County did not have adequate controls to ensure supporting documentation was retained for all reports submitted. Also, the County did not have adequate procedures in place to ensure the timeliness of the submissions.
Effect:
The County was not in compliance with the programs reporting.
Questioned Costs:
None
Recommendation:
We recommend that management review their policies and make revisions where necessary to ensure that documentation is maintained to support amounts reported by the County in their quarterly grant reporting. We also recommend that management review their policies and procedures and make changes necessary to ensure reports are filed timely.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-006
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19-Emergency Rental Assistance
Assistance Listing Number: 21.023
Award Number and Year: 2021
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance - 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charge to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must:
I. Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
II. Be incorporated into the official records of the non-Federal entity;
III. Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;
IV. Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
V. Comply with the established accounting policies and practices of the non-Federal entity;
VI. Support the distribution of the employee's salary and wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
Time and Effort Certifications were not documented in accordance with federal requirements. The County was unable to provide adequate support to validate actual payroll expenses charged to the federal program for 7 of 60 time and effort certifications tested.
Cause:
The County did not have adequate controls to ensure that time and effort reporting was performed in accordance with federal requirements.
Effect:
There is an increased risk of charging unallowed payroll costs to the program.
Questioned Costs:
$11,045
Recommendation:
The County should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The County should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-007
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
Assistance Listing Number: 21.027
Award Number and Year: 2021
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance - 2 CFR Section 200.332 – Requirements for Pass-Through Entities states in part, that all pass-through entities must:
(a) Verify that every subrecipient is audited as required by Subpart F – Audit Requirements of this part when it is expected that the subrecipient’s Federal award expended during the respective fiscal year equaled or exceeded the threshold set forth in section 200.501 Audit requirements.
Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
The County was not able to provide support to show it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F – Audit Requirements (Subpart F).
Context:
Exceptions were noted for 8 of 8 subrecipients selected for testing:
• The County was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The County could not produce evidence of verification that the subrecipient’s Federal awards expended during the fiscal year were below the threshold set forth in section 200.501 Audit Requirements.
Cause:
The County did not establish effective internal controls and procedures over subrecipient monitoring.
Effect:
Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple years, and these discrepancies may not be properly monitored, detected, and corrected by the County personnel on a timely basis.
Questioned Costs:
Undetermined.
Recommendation:
The County should review and enhance internal controls and procedures to ensure that evaluation of independent audits is performed.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-007
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
Assistance Listing Number: 21.027
Award Number and Year: 2021
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance - 2 CFR Section 200.332 – Requirements for Pass-Through Entities states in part, that all pass-through entities must:
(a) Verify that every subrecipient is audited as required by Subpart F – Audit Requirements of this part when it is expected that the subrecipient’s Federal award expended during the respective fiscal year equaled or exceeded the threshold set forth in section 200.501 Audit requirements.
Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
The County was not able to provide support to show it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F – Audit Requirements (Subpart F).
Context:
Exceptions were noted for 8 of 8 subrecipients selected for testing:
• The County was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The County could not produce evidence of verification that the subrecipient’s Federal awards expended during the fiscal year were below the threshold set forth in section 200.501 Audit Requirements.
Cause:
The County did not establish effective internal controls and procedures over subrecipient monitoring.
Effect:
Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple years, and these discrepancies may not be properly monitored, detected, and corrected by the County personnel on a timely basis.
Questioned Costs:
Undetermined.
Recommendation:
The County should review and enhance internal controls and procedures to ensure that evaluation of independent audits is performed.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-007
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
Assistance Listing Number: 21.027
Award Number and Year: 2021
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance - 2 CFR Section 200.332 – Requirements for Pass-Through Entities states in part, that all pass-through entities must:
(a) Verify that every subrecipient is audited as required by Subpart F – Audit Requirements of this part when it is expected that the subrecipient’s Federal award expended during the respective fiscal year equaled or exceeded the threshold set forth in section 200.501 Audit requirements.
Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
The County was not able to provide support to show it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F – Audit Requirements (Subpart F).
Context:
Exceptions were noted for 8 of 8 subrecipients selected for testing:
• The County was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The County could not produce evidence of verification that the subrecipient’s Federal awards expended during the fiscal year were below the threshold set forth in section 200.501 Audit Requirements.
Cause:
The County did not establish effective internal controls and procedures over subrecipient monitoring.
Effect:
Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple years, and these discrepancies may not be properly monitored, detected, and corrected by the County personnel on a timely basis.
Questioned Costs:
Undetermined.
Recommendation:
The County should review and enhance internal controls and procedures to ensure that evaluation of independent audits is performed.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-005
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: CDBG Entitlement Grant Cluster
Assistance Listing Number: 14.218
Award Number and Period: B-22-UC-24-0011, B-20-UW-24-0011
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance - 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charge to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must:
(i) Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity;
(vi) Support the distribution of the employee's salary and wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
Time and Effort Certifications were not documented in accordance with federal requirements. The County was unable to provide adequate support to validate actual payroll expenses charged to the federal program for 1 of 40 time and effort certifications tested.
Cause:
The County did not have adequate controls to ensure that time and effort reporting was performed in accordance with federal requirements.
Effect:
There is an increased risk of charging unallowed payroll costs to the program.
Questioned Costs:
$1,260
Recommendation:
The County should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The County should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-010
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: CDBG Entitlement Grant Cluster
Assistance Listing Number: 14.218
Award Number and Period: B-22-UC-24-0011, B-20-UW-24-0011
Compliance Requirement: Reporting
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
24 CFR Part 75, requires that grantees enter their Section 3 activities on the closeout screens in IDIS as well as within their annual reporting in the Consolidated Annual Performance and Evaluation Report (CAPER). Beginning in July 2021, grantees reporting in Disaster Recovery Grant Reporting system (DRGR) shall identify those activities that are subject to Section 3 requirements in the applicable DRGR action plan. DRGR is the management information system primarily used by CDBG-DR, CDBG-MIT, NSP, and RHP grantees to access grant funds and report performance accomplishments for grant-funded activities. The grantee must enter Section 3 accomplishments in the performance report as progress is made towards the Section 3 benchmarks.
A grantee’s CAPER, submitted through the IDIS e-Con Planning Suite, is due 90 days after the close of a jurisdiction’s program year.
Condition:
The FY2022 CAPER report was due by September 29, 2023, but was submitted on December 29, 2023.
Cause:
The County does not have effective controls in place to ensure reports are submitted timely.
Effect:
The County is not in compliance with the program’s reporting requirements which could impact the Federal agencies ability to monitor the program.
Recommendation:
We recommend the County review and enhance their procedures to ensure that all required reports are submitted accurately and timely.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-005
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: CDBG Entitlement Grant Cluster
Assistance Listing Number: 14.218
Award Number and Period: B-22-UC-24-0011, B-20-UW-24-0011
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance - 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charge to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must:
(i) Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity;
(vi) Support the distribution of the employee's salary and wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
Time and Effort Certifications were not documented in accordance with federal requirements. The County was unable to provide adequate support to validate actual payroll expenses charged to the federal program for 1 of 40 time and effort certifications tested.
Cause:
The County did not have adequate controls to ensure that time and effort reporting was performed in accordance with federal requirements.
Effect:
There is an increased risk of charging unallowed payroll costs to the program.
Questioned Costs:
$1,260
Recommendation:
The County should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The County should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-010
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: CDBG Entitlement Grant Cluster
Assistance Listing Number: 14.218
Award Number and Period: B-22-UC-24-0011, B-20-UW-24-0011
Compliance Requirement: Reporting
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
24 CFR Part 75, requires that grantees enter their Section 3 activities on the closeout screens in IDIS as well as within their annual reporting in the Consolidated Annual Performance and Evaluation Report (CAPER). Beginning in July 2021, grantees reporting in Disaster Recovery Grant Reporting system (DRGR) shall identify those activities that are subject to Section 3 requirements in the applicable DRGR action plan. DRGR is the management information system primarily used by CDBG-DR, CDBG-MIT, NSP, and RHP grantees to access grant funds and report performance accomplishments for grant-funded activities. The grantee must enter Section 3 accomplishments in the performance report as progress is made towards the Section 3 benchmarks.
A grantee’s CAPER, submitted through the IDIS e-Con Planning Suite, is due 90 days after the close of a jurisdiction’s program year.
Condition:
The FY2022 CAPER report was due by September 29, 2023, but was submitted on December 29, 2023.
Cause:
The County does not have effective controls in place to ensure reports are submitted timely.
Effect:
The County is not in compliance with the program’s reporting requirements which could impact the Federal agencies ability to monitor the program.
Recommendation:
We recommend the County review and enhance their procedures to ensure that all required reports are submitted accurately and timely.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-008
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Award Number and Year: MD033, 2023
Compliance Requirement: Special Test – Top of the Waiting List
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
The Public Housing Authority (PHA) must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. "Selection" from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.01 through 982.207).
Condition:
We were unable to perform testing as there were no individuals pulled from the waitlist during FY 2023.
Cause:
Due to staffing shortfalls, the County did not pull any individuals from the waitlist.
Effect:
We were unable to determine if the County was incompliance with the Top of the Waiting List requirement.
Questioned Costs:
Undetermined.
Recommendation:
We recommend the County ensure individuals are selected from the top of the waiting list in accordance with program requirements.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-009
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Award Number and Year: MD033, 2023
Compliance Requirement: Special Test – Reasonable Rent Changes
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
The PHA’s administrative plan must state the method used by the PHA to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The PHA determination must consider unit attributes, such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner.
The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is reasonable rent (initially and during the term of the HAP contract) (2 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507).
Condition:
The County was unable to provide a listing of tenants with rent increases during the FY 2023 to determine the reasonableness of rent changes.
Cause:
The County’s software vendor was unable to provide a report to show tenants with rent increases during FY 2023.
Effect:
We were unable to determine if the County was incompliance with the reasonable rent change requirement.
Questioned Costs:
Undetermined.
Recommendation:
We recommend the County keep records to show all tenant who had a rent increase during the year.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-008
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Award Number and Year: MD033, 2023
Compliance Requirement: Special Test – Top of the Waiting List
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
The Public Housing Authority (PHA) must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. "Selection" from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.01 through 982.207).
Condition:
We were unable to perform testing as there were no individuals pulled from the waitlist during FY 2023.
Cause:
Due to staffing shortfalls, the County did not pull any individuals from the waitlist.
Effect:
We were unable to determine if the County was incompliance with the Top of the Waiting List requirement.
Questioned Costs:
Undetermined.
Recommendation:
We recommend the County ensure individuals are selected from the top of the waiting list in accordance with program requirements.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-009
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Award Number and Year: MD033, 2023
Compliance Requirement: Special Test – Reasonable Rent Changes
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
The PHA’s administrative plan must state the method used by the PHA to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The PHA determination must consider unit attributes, such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner.
The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is reasonable rent (initially and during the term of the HAP contract) (2 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507).
Condition:
The County was unable to provide a listing of tenants with rent increases during the FY 2023 to determine the reasonableness of rent changes.
Cause:
The County’s software vendor was unable to provide a report to show tenants with rent increases during FY 2023.
Effect:
We were unable to determine if the County was incompliance with the reasonable rent change requirement.
Questioned Costs:
Undetermined.
Recommendation:
We recommend the County keep records to show all tenant who had a rent increase during the year.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-008
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Award Number and Year: MD033, 2023
Compliance Requirement: Special Test – Top of the Waiting List
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
The Public Housing Authority (PHA) must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. "Selection" from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.01 through 982.207).
Condition:
We were unable to perform testing as there were no individuals pulled from the waitlist during FY 2023.
Cause:
Due to staffing shortfalls, the County did not pull any individuals from the waitlist.
Effect:
We were unable to determine if the County was incompliance with the Top of the Waiting List requirement.
Questioned Costs:
Undetermined.
Recommendation:
We recommend the County ensure individuals are selected from the top of the waiting list in accordance with program requirements.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-009
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Award Number and Year: MD033, 2023
Compliance Requirement: Special Test – Reasonable Rent Changes
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
The PHA’s administrative plan must state the method used by the PHA to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The PHA determination must consider unit attributes, such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner.
The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is reasonable rent (initially and during the term of the HAP contract) (2 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507).
Condition:
The County was unable to provide a listing of tenants with rent increases during the FY 2023 to determine the reasonableness of rent changes.
Cause:
The County’s software vendor was unable to provide a report to show tenants with rent increases during FY 2023.
Effect:
We were unable to determine if the County was incompliance with the reasonable rent change requirement.
Questioned Costs:
Undetermined.
Recommendation:
We recommend the County keep records to show all tenant who had a rent increase during the year.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-004
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19-Emergency Rental Assistance
Assistance Listing Number: 21.023
Award Number and Year: 2021
Compliance Requirement: Reporting
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance: Quarterly reports are required to be submitted in accordance with Treasury guidance beginning in the first quarter of 2021 through September of 2022 for ERA1 and through September of 2025 for ERA 2. The quarterly reports are required to be submitted by the 15th of the following month.
Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
For 2 of the 5 reports tested, we were unable to verity key line items were submitted. Also, 1 of the 5 quarterly reports tested were not submitted timely.
Cause:
The County did not have adequate controls to ensure supporting documentation was retained for all reports submitted. Also, the County did not have adequate procedures in place to ensure the timeliness of the submissions.
Effect:
The County was not in compliance with the programs reporting.
Questioned Costs:
None
Recommendation:
We recommend that management review their policies and make revisions where necessary to ensure that documentation is maintained to support amounts reported by the County in their quarterly grant reporting. We also recommend that management review their policies and procedures and make changes necessary to ensure reports are filed timely.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-006
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19-Emergency Rental Assistance
Assistance Listing Number: 21.023
Award Number and Year: 2021
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance - 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charge to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must:
I. Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
II. Be incorporated into the official records of the non-Federal entity;
III. Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;
IV. Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
V. Comply with the established accounting policies and practices of the non-Federal entity;
VI. Support the distribution of the employee's salary and wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
Time and Effort Certifications were not documented in accordance with federal requirements. The County was unable to provide adequate support to validate actual payroll expenses charged to the federal program for 7 of 60 time and effort certifications tested.
Cause:
The County did not have adequate controls to ensure that time and effort reporting was performed in accordance with federal requirements.
Effect:
There is an increased risk of charging unallowed payroll costs to the program.
Questioned Costs:
$11,045
Recommendation:
The County should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The County should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-007
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
Assistance Listing Number: 21.027
Award Number and Year: 2021
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance - 2 CFR Section 200.332 – Requirements for Pass-Through Entities states in part, that all pass-through entities must:
(a) Verify that every subrecipient is audited as required by Subpart F – Audit Requirements of this part when it is expected that the subrecipient’s Federal award expended during the respective fiscal year equaled or exceeded the threshold set forth in section 200.501 Audit requirements.
Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
The County was not able to provide support to show it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F – Audit Requirements (Subpart F).
Context:
Exceptions were noted for 8 of 8 subrecipients selected for testing:
• The County was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The County could not produce evidence of verification that the subrecipient’s Federal awards expended during the fiscal year were below the threshold set forth in section 200.501 Audit Requirements.
Cause:
The County did not establish effective internal controls and procedures over subrecipient monitoring.
Effect:
Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple years, and these discrepancies may not be properly monitored, detected, and corrected by the County personnel on a timely basis.
Questioned Costs:
Undetermined.
Recommendation:
The County should review and enhance internal controls and procedures to ensure that evaluation of independent audits is performed.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-007
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
Assistance Listing Number: 21.027
Award Number and Year: 2021
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance - 2 CFR Section 200.332 – Requirements for Pass-Through Entities states in part, that all pass-through entities must:
(a) Verify that every subrecipient is audited as required by Subpart F – Audit Requirements of this part when it is expected that the subrecipient’s Federal award expended during the respective fiscal year equaled or exceeded the threshold set forth in section 200.501 Audit requirements.
Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
The County was not able to provide support to show it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F – Audit Requirements (Subpart F).
Context:
Exceptions were noted for 8 of 8 subrecipients selected for testing:
• The County was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The County could not produce evidence of verification that the subrecipient’s Federal awards expended during the fiscal year were below the threshold set forth in section 200.501 Audit Requirements.
Cause:
The County did not establish effective internal controls and procedures over subrecipient monitoring.
Effect:
Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple years, and these discrepancies may not be properly monitored, detected, and corrected by the County personnel on a timely basis.
Questioned Costs:
Undetermined.
Recommendation:
The County should review and enhance internal controls and procedures to ensure that evaluation of independent audits is performed.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.
Reference Number: 2023-007
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
Assistance Listing Number: 21.027
Award Number and Year: 2021
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Significant Deficiency in Internal Controls over Compliance, Other Matters
Criteria or Specific Requirement:
Compliance - 2 CFR Section 200.332 – Requirements for Pass-Through Entities states in part, that all pass-through entities must:
(a) Verify that every subrecipient is audited as required by Subpart F – Audit Requirements of this part when it is expected that the subrecipient’s Federal award expended during the respective fiscal year equaled or exceeded the threshold set forth in section 200.501 Audit requirements.
Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish a maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
The County was not able to provide support to show it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F – Audit Requirements (Subpart F).
Context:
Exceptions were noted for 8 of 8 subrecipients selected for testing:
• The County was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The County could not produce evidence of verification that the subrecipient’s Federal awards expended during the fiscal year were below the threshold set forth in section 200.501 Audit Requirements.
Cause:
The County did not establish effective internal controls and procedures over subrecipient monitoring.
Effect:
Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple years, and these discrepancies may not be properly monitored, detected, and corrected by the County personnel on a timely basis.
Questioned Costs:
Undetermined.
Recommendation:
The County should review and enhance internal controls and procedures to ensure that evaluation of independent audits is performed.
Views of Responsible Officials:
The County agrees with this finding. See separate Correction Action Plan related to this finding.